Will Algae Biofuels Hit the Highway?

An Arizona-based algae technology company says it’s on to something big: harnessing the growth of algae at a commercial scale so that it can ultimately be used as a transportation fuel. “Heliae” broke ground Friday on its new plant. Now, all it needs is an abundance of sunshine, water and carbon dioxide.

But while the ingredients to make algae may be simple, it is still an open question as to whether current pilot facilities can attract private investors that will enable the industry to gear up. Beyond the financial concerns, environmental worries persist. It can involve taking carbon emissions from power plants to grow the algae before converting it to something that would run cars, trucks and airplanes.

In a phone interview, Heliae's Chief Executive Dan Simon explained to this writer that the company's ultimate goal is to produce transportation fuels. To get to that point, though, it will focus on near-term aims that are more attainable: chemicals, cosmetics and healthy foods. As it develops, the enterprise will then expand overseas and into the Asia Pacific region.

“We will never take our eyes off the transportation fuels,” says Simon. “But there are stepping stones to get us there. Production costs have to come down. Right now, the economics don’t work. It will be 5 to 10 years before all of this will affect the price at the pump.”

Simon continues, saying that “good science takes time” and that by first picking the “low hanging fruit” the company will drive revenues and efficiencies, and bring down production costs. Among the key goals the company is working towards: Ensuring that the process has a “positive energy impact,” meaning that it can’t take more energy to grow the algae than the amount of carbon dioxide that the algae would absorb.

Critics maintain that the recycling of carbon lends credence to the burning of fossil fuels and in the end, more carbon is emitted than is captured. The journal of Environmental Science and Technology, furthermore, looked two years ago at the life cycle of algae compared to other bio-fuels such as corn and switch-grass. It concluded that using conventional crops to create fuels will result in fewer greenhouse gas emissions and less water consumption than if algae is used to do the same thing.

The study also says that most of the carbon that is getting captured is coming from places other than power plants and oil refineries. That's because there is not yet an effective way to bottle such releases from industrial sources.

Those findings, however, have been refuted by the Algae Biomass Association, which says that researchers have used outdated data that is tied to older production methods to draw their conclusions. To that end, the industry, which has kept its production processes proprietary, is now saying that it may be willing to share its newest information so that such students can better understand today’s technologies.

“If it cost you more energy to make it, then what is the point,” says Nick Donowitz, director of corporate development for Heliae. "Based on the work we've done, we are charging on a path toward an energy neutral or energy positive system."

Algae, today, is a blip on the radar. But, tomorrow, it may become a full-scale blimp. According to Pike Research, it could be a 61 million barrels a year commodity with a market value of $1.3 billion by 2020. That’s a compound growth rate of 72 percent, it adds. To put that in context, 83 million barrels of oil are consumed each day around the world. Of that, the United States uses about 18 million a day.